Xbox Live

In 2002, Microsoft released the successful online gaming service Xbox Live on it's first console, the Xbox. It quickly became the de facto standard for internet gaming on consoles. By subscribing to Xbox Live people can play games with (or against) other Xbox Live players all around the world.

Unlike other online multiplayer systems (including those used on the PC and Playstation 2), XBox Live is highly centralized. This means that while game companies supply the networking code and gameplay, Microsoft provides the server bandwidth and user frontend; this in turn removes much of the financial burden from game developers, adding incentive to add multiplayer modes to games. This system also means that instead of paying developer firms for the use of individual games (as is done in the PC market and especially that of massively multiplayer online games) users need to pay only one yearly fee (currently $50). Also, because Xbox Live is broadband-only, it is much less susceptible to network lag. While some third-party services for online play also exist, they are unsupported by Microsoft and are of inferior quality.

Xbox Live received a major boost in May 2004 when Electronic Arts announced it would support the service for the first time (the company had formerly only supported the Playstation 2's online capabilities).

In July 2004, Microsoft reported that Xbox Live had reached one million subscribers.